Defence Industrial Strategy 2025: Opportunities for Transformation

The UK Government’s recently published Defence Industrial Strategy 2025 sets out an ambitious vision: to make Defence not only a guarantor of national security but also an engine for sustainable economic growth.

For defence primes, Tier 1 suppliers and their extended supply chains, the message is clear. The Ministry of Defence (MOD) is seeking greater resilience, deeper collaboration with UK-based industry, and accelerated adoption of innovation across automation, digitalisation and energy transition.

As a company delivering power, control and automation solutions across critical industries, iconsys sees strong alignment between the challenges outlined in the strategy and the solutions we are already helping to deliver in other regulated sectors. This article explores four key themes where transformation is expected – and where the defence sector can draw on proven innovation.

 

1. Digitalisation and Automation

The strategy emphasises the need to harness advanced automation, robotics and digital tools to modernise defence operations. From manufacturing facilities to logistics, shipyards to maintenance depots, the pressure is on to improve productivity, shorten lead times, and reduce through-life costs.

Technologies such as digital twins, predictive analytics and smart controls are already redefining operational readiness in industries such as automotive and energy. Applied effectively to Defence, they could:

· Reduce downtime across critical platforms by enabling predictive maintenance.

· Improve quality and consistency of output through greater use of robotics and automation.

· Enhance resilience by integrating real-time monitoring and decision-support systems.

For primes and Tier 1 suppliers, the challenge is not only to introduce these technologies but to do so in a way that is interoperable, cybersecure and scalable across a wide range of programmes. This calls for collaboration with trusted integration partners who can bridge operational technology with digital innovation.

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2. Energy Transition and Resilient Power

The MOD has committed to aligning with the UK’s wider Net Zero 2050 targets while also ensuring operational resilience. Defence estates, training bases, and operational facilities are under increasing pressure to reduce carbon emissions while securing reliable, cost-effective energy supplies.

The strategy points to a future where microgrids, renewables integration, and advanced energy management systems will play a central role. This shift is not just about sustainability—it is about mission assurance. A resilient energy system reduces vulnerability to supply disruption and ensures operations can continue in the face of external shocks.

Opportunities for industry include:

· Designing and delivering modular energy systems that combine solar PV, wind and battery storage.

· Embedding intelligent energy management to optimise performance and reduce waste.

· Integrating power systems with automation and control frameworks for greater resilience.

Across other sectors, we are already seeing these systems deliver measurable reductions in carbon footprint and energy costs. Translating these lessons into Defence offers the chance to improve both sustainability and security.

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3. Obsolescence and Asset Life Extension

One of the most striking challenges highlighted in the strategy is the scale of ageing assets across Defence. From production facilities to weapons platforms, obsolescence is becoming a critical risk – affecting availability, safety and cost efficiency.

Replacing entire systems is rarely feasible within budgetary constraints. Instead, the focus is shifting to cost-effective upgrades, modernisation, and life extension strategies. This demands:

· Migration away from outdated automation and control systems.

· Introduction of modern platforms that are secure, supported and scalable.

· Integration of new technologies into legacy environments without compromising safety or compliance.

For primes and Tier 1 suppliers, the ability to offer effective obsolescence management is increasingly a differentiator. The MOD will expect supply chain partners to bring solutions that extend asset life, reduce dependency on obsolete technologies, and ensure compliance with evolving safety standards.

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4. Supply Chain Sovereignty and Skills

The strategy makes clear that strengthening sovereign capability is a priority. Reducing dependency on overseas supply chains, particularly for critical technologies, will be essential to ensure resilience in times of geopolitical uncertainty.

This creates two immediate implications for the defence industry:

· Supply Chain Resilience: Greater focus on UK-based system integrators, technology partners and SMEs that can deliver platform-independent solutions without lock-in to a single vendor.

· Skills and Innovation: Defence primes are expected to work with academia, mid-tier suppliers and SMEs to build the skills base, accelerate innovation and foster collaboration across sectors.

This focus plays to the strengths of agile UK-based companies able to combine engineering expertise with proven partnerships. By contributing to sovereign supply chains, mid-tier providers strengthen the resilience of the UK defence ecosystem while opening new opportunities for innovation.

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Unlocking the Opportunities

The Defence Industrial Strategy 2025 is both a challenge and an invitation. It challenges industry to innovate faster, collaborate more deeply, and contribute to the UK’s security and sustainability goals. At the same time, it opens significant opportunities for those able to bring proven solutions from adjacent industries into Defence.

From iconsys’ perspective, the areas of greatest impact will come from:

· Cross-sector technology transfer – applying best practice in automation, controls and digitalisation from sectors such as automotive, energy and infrastructure to Defence contexts.

· Integrated energy systems – building resilient, modular, low-carbon energy solutions for critical defence estates.

· Lifecycle management – helping to modernise and extend the life of ageing assets while ensuring compliance and safety.

· Collaboration and independence – working with defence primes and technology partners while maintaining platform independence to ensure flexibility and resilience.

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Conclusion

Defence is entering a period of accelerated transformation. The MOD’s priorities of digitalisation, sustainability and obsolescence management and sovereign supply chains align closely with capabilities already proven across other critical sectors.

For defence primes and Tier 1 suppliers, the opportunity lies in partnering with UK-based innovators who can deliver these solutions with agility, independence and long-term value.

The Defence Industrial Strategy 2025 sets a clear direction.

The question now is how quickly industry can mobilise to deliver.